Contents

That's all window dressing. That's not fundamental. That's not getting at change and the transformation that must take place. Sure we have to solve problems. Certainly stamp out the fire. Stamp out the fire and get nowhere. Stamp out the fires puts us back to where we were in the first place. Taking action on the basis of results without theory of knowledge, without theory of variation, without knowledge about a system. Anything goes wrong, do something about it, overreacting; acting without knowledge, the effect is to make things worse. With the best of intentions and best efforts, managing by results is, in effect, exactly the same, as Dr. Myron Tribus put it, while driving your automobile, keeping your eye on the rear view mirror, what would happen? And that's what management by results is, keeping your eye on results.

The Deming of America, Documentary broadcast on the PBS network (1991)

They realized that the gains that you get by statistical methods are gains that you get without new machinery, without new people. Anybody can produce quality if he lowers his production rate. That is not what I am talking about. Statistical thinking and statistical methods are to Japanese production workers, foremen, and all the way through the company, a second language. In statistical control you have a reproducible product hour after hour, day after day. And see how comforting that is to management, they now know what they can produce, they know what their costs are going to be.

I think that people here expect miracles. American management thinks that they can just copy from Japan—but they don't know what to copy!

In Europe and in America, people are now more interested in the cost of quality and in systems of quality-audit. But in Japan, we are keeping very strong interest to improve quality by use of methods which you started....when we improve quality we also improve productivity, just as you told us in 1950 would happen.

p. 2

Defects are not free. Somebody makes them, and gets paid for making them.

p. 11

Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.

p. 23 (Point 5 from the "Condensation of the 14 Points for Management" presented in Chapter 2)

Quality comes not from inspection, but from improvement of the production process.

p. 29

Part of America's industrial problems is the aim of its corporate managers. Most American executives think they are in the business to make money, rather than products or service...The Japanese corporate credo, on the other hand, is that a company should become the world's most efficient provider of whatever product and service it offers. Once it becomes the world leader and continues to offer good products, profits follow.

p. 99

The supposition is prevalent the world over that there would be no problems in production or service if only our production workers would do their jobs in the way that they we taught. Pleasant dreams. The workers are handicapped by the system, and the system belongs to the management.

p. 134

We cannot rely on mass inspection to improve quality, though there are times when 100 percent inspection is necessary. As Harold S. Dodge said many years ago, 'You cannot inspect quality into a product.' The quality is there or it isn't by the time it's inspected.

p. 139

Foremost is the principle that the purpose of consumer research is to understand the customer's needs and wishes, and thus design product and service that will provide better living for him in the future. A second principle is that no one can guess the future loss of business from a dissatisfied customer...

The aim of this book is to try to explain to top management of America that their job is to improve competitive position. One need not be an economist to understand from the papers that many American products are not competitive at home or abroad, lost to foreign invasion, causing unemployment at home. Failure of management to plan for the future and to foresee problems has nurtured waste of manpower, of materials and of machine time, all of which raise the manufacturers costs and the price the purchaser must pay. The consumer is not always willing to subsidize this waste.

p. i; Preface

Loss of market begets unemployment. Emphasis has been on short-term profit, to the undernourishment of plans that might generate new product and service that would keep the company alive and provide jobs and more jobs. It is no longer socially acceptable performance to lose market and to dump hourly workers on to the heap of unemployed.

The basic sickness of American industry and resulting unemployment is failure of top management to manage. Loss of market, and unemployment, are not foreordained. They are not inevitable. They are not acceptable. The day is past when people in management need not know anything about management by which I mean to include problems of production, supervision, training.

p. i; Preface

The 14 points [for quality control] apply anywhere, to small organizations as well as to large ones...:

Create constancy of purpose toward improvement of product and service, with a plan to become competitive and to stay in business. Decide whom top management is responsible to.

Adopt the new philosophy. We are in a new economic age. We can no longer live with commonly accepted levels of delays, mistakes, defective materials, end defective workmanship.

Cease dependence on mass inspection. Require, instead, statistical evidence that quality is built in, to eliminate need for inspection on a mass tasis. Purchasing managers have a new job, and must learn it.

End the practice of awarding business on the basis of price tag. Instead, depend on meaningful measures of quality...

Find problems. It is management's job to work continually on the system (design, incoming materials, composition of material, maintenance, improvement of machine, training, supervision, retraining).

Create a structure in top management that will push every day on the above 13 points

p. 17

Point 10 of 14 has been rephrased to:

Eliminate slogans, exhortations, and targets for the workforce asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, as the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the workforce.

Cited in: Morgen Witzel (2005). Encyclopedia of History of American Management. p. 114

Statistical methods had taken fire in America around 1942, following a series of ten-day intensive courses for engineers, initiated by Stanford University on a suggestion from this author. The war department also gave courses at factories of suppliers. Brilliant applications attracted much attention, but the flare of statistical methods by themselves, in an atmosphere in which management did not know their responsibilities, burned, sputtered, fizzled and died out.

p. 101

Why waste knowledge?... No company can afford to waste knowledge. Failure of management to breakdown barriers between activities... is one way to waste knowledge. People that are not working together are not contributing their best to the company. People as they work together, feeling secure in the job reinforce their knowledge and efforts. Their combined output, when they are working together, is more than the sum of their separate

The prevailing style of management must undergo transformation. A system cannot understand itself. The transformation requires a view from outside. The aim of this chapter is to provide an outside view—a lens—that I call a system of profound knowledge. It provides a map of theory by which to understand the organizations that we work in. The first step is transformation of the individual. This transformation is discontinuous. It comes from understanding of the system of profound knowledge. The individual, transformed, will perceive new meaning to his life, to events, to numbers, to interactions between people. Once the individual understands the system of profound knowledge, he will apply its principles in every kind of relationship with other people. He will have a basis for judgment of his own decisions and for transformation of the organizations that he belongs to.

The various segments of the system of profound knowledge proposed here cannot be separated. They interact with each other. Thus, knowledge of psychology is incomplete without knowledge of variation.

A manager of people needs to understand that all people are different. This is not ranking people. He needs to understand that the performance of anyone is governed largely by the system that he works in, the responsibility of management.

What is a system? A system is a network of interdependent components that work together to try to accomplish the aim of the system. A system must have an aim. Without an aim, there is no system. The aim of the system must be clear to everyone in the system. The aim must include plans for the future. The aim is a value judgment. (We are of course talking here about a man-made system.)

It is important that an aim never be defined in terms of a specific activity or method. It must always relate to a better life for everyone.

Choice of aim is clearly a matter of clarification of values, especially on the choice between possible options.

A system must be managed. It will not manage itself. Left to themselves in the Western world, components become selfish, competitive, independent profit centres, and thus destroy the system. . . . The secret is cooperation between components toward the aim of the organization. We can not afford the destructive effect of competition.

To successfully respond to the myriad of changes that shake the world, transformation into a new style of management is required. The route to take is what I call profound knowledge - knowledge for leadership of transformation.

Management’s job. It is management’s job to direct the efforts of all components toward the aim of the system. The first step is clarification: everyone in the organization must understand the aim of the system, and how to direct his efforts toward it. Everyone must understand the damage and loss to the whole organization from a team that seeks to become a selfish, independent, profit centre.

. . .the principle that where there is fear, there will be wrong figures. . . .

What is the variation trying to tell us about a process, about the people in the process?

Knowledge is theory. We should be thankful if action of management is based on theory. Knowledge has temporal spread. Information is not knowledge. The world is drowning in information but is slow in acquisition of knowledge. There is no substitute for knowledge.

Experience by itself teaches nothing...Without theory, experience has no meaning. Without theory, one has no questions to ask. Hence without theory there is no learning.

Total Quality Management (TQM) in the Department of Defense is a strategy for continuously improving performance at every level, and in all areas of responsibility. It combines fundamental management techniques, existing improvement efforts, and specialized technical tools under a disciplined structure focused on continuously improving all processes. Improved performance is directed at satisfying such broad goals as cost, quality, schedule, and mission need and suitability. Increasing user satisfaction is the overriding objective. The TQM effort builds on the pioneering work of Dr. W. E. Deming, Dr. J. M. Juran, and others, and benefits from both private and public sector experience with continuous process improvement.

Two of my favourite current management writers are Americans – Clayton Christensen and Peter Senge. My all-time favourite gurus are Peter Drucker, who became a greatly admired friend, and W. Edwards Deming. The thing that set these people apart from many other business commentators is that they didn’t propose any all - encompassing theories, they simply told it like it is.
The fact is that life cannot be summarised as a simple set of rules; it’s far too complicated for that and it’s always changing. Unfortunately, all-encompassing panaceas do seem to be popular and certainly sell books, which is why I so value the objectivity of thought that each of these people brought to the debate.

Robert Heller in: Interview: Robert Heller: Alistair Schofield speaks to Robert Heller, journalist, commentator and the author of more than 50 books on management and business strategy. (2006),